March 27, 2018 - Written by James Fuller
STORY LINK GBP/DKK Exchange Rate Update: Sterling Drops on UK Business Worries about Brexit
On Monday, the Pound to Danish Krone exchange rate saw a gradual decline over the course of daily trading.
The GBP/DKK exchange rate opened in the region of 8.5286, but later closed down lower around 8.5077 by the evening.
There was little direct UK economic data to refer to, so instead the Pound was affected by speculation about the future state of US-China trade relations.
Sterling initially advanced because the US Dollar was weakened by concerns that there could be a risk of a trade war between the world’s two largest economies.
In turn, this raised demand for the Pound as by extension it made the UK currency seem a more stable option for currency traders to invest in.
There was little Danish economic data to refer to on Monday, but as the Danish Krone is pegged to the Euro, gains for the single currency also pushed the DKK slightly higher.
Pound to Danish Krone (GBP/DKK) Exchange Rate Dips after UK Business Warning on Brexit
The latest Pound to Danish Krone exchange rate losses have been caused by voiced concerns about the UK jobs market after Brexit.
A recent report from the Migration Advisory Committee (MAC) has indicated that there are growing concerns about how easy it will be to fill vacancies after Brexit.
The report highlights perceptions of greater enthusiasm and reliability among EU workers, as well as a better work ethic.
The issue of there not being enough workers for certain sectors, like agriculture, has been a prevailing worry among UK businesses since the EU Referendum vote.
There were warnings about edible crops remaining unharvested in 2017 due to a shortage of workers, later culminating in reports of fruit being left to rot because it could not be picked.
While the availability of workers for specific roles after Brexit is something of an unpredictable issue, the MAC’s latest report has nonetheless lowered demand for the Pound.
Sterling has also lost ground in the GBP/DKK pairing because of signs that a US-China trading conflict may yet be averted.
This possibility has raised demand for the US Dollar, thereby triggering a dip in the Pound’s value.
In a more neutral event, Guardian Economics Correspondent Richard Partington has considered how the UK economy has coped with Brexit since the exit process began;
‘As the one-year countdown to Brexit looms, the British economy is showing signs of steadying from the fallout triggered by the EU referendum, according to a Guardian analysis of economic news over the past month.
After progress with Brussels towards a two-year transitional deal to smooth Britain’s formal exit from the EU on 29 March 2019, the Pound has risen back towards the highest levels seen since the leave vote.
Inflation triggered by the drop in Sterling after the referendum is finally beginning to fade, just as pay rises begin to come through for workers.
But while the Guardian’s latest Brexit dashboard hands support to Philip Hammond’s reasons for feeling “Tiggerish” at the spring statement earlier this month, sharp challenges remain.’
Danish Krone to Pound Exchange Rate Rises despite Falling Business Confidence
The Krone to Pound exchange rate (DKK/GBP) has risen on 27th March, despite the latest Danish news being negative.
This has been the business confidence reading for March, which has shown a decline from -1 points to -2.
Although this represents sliding levels of economic confidence among Danish businesses, it is not quite so bad as the -3 point figure seen in January.
Denmark’s confidence reading has fluctuated over the past year, showing rising levels of optimism in July before no change in August and September, for example.
Pound to Danish Krone Exchange Rate Forecast: Are Further GBP/DKK Losses Incoming on UK GDP Stats?
The Pound’s recent losses against the Danish Krone could extend in the future, when UK GDP growth rate stats are released on 29th March.
Estimates are for a reported slowdown in quarter-on-quarter and year-on-year levels of growth, which could damage the value of the Pound.
Also out on Thursday will be business investment stats for Q4 2018; the year-on-year reading is predicted to show an expansion from 1.9% investment growth to 2.1%.
With no Danish data out on the day, such a result could slightly reduce any negative effects from slowing GDP data.
The next Danish data won’t come out until 3rd April, when a manufacturing PMI reading for March is tipped to show a slowdown.
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TAGS: Pound Sterling Forecasts